Gold Continues to Equivocate

Gold
Continues to Equivocate

Commentary for Wednesday, May 1, 2019 – Gold closed down $1.40 today at $1281.40 but the after-market was stronger by $5.00 because the FOMC left interest rate unchanged and then quickly moved back to unchanged and then weaker.

In
the early part of the trading day everyone was unsure what the outcome would be
after the FOMC begins talking about their latest meeting – which took place
Tuesday and Wednesday. The Fed does not want to say anything before the markets
close and so the aftermarket if volatile should tell you whether the public saw
anything in the latest tea leafs.

There
are two schools of thinking, the “optimistic” players claim the Fed will not
change interest rates this year, the “pessimistic” players will cite improving
US economic conditions will force the Fed to “cool” down this economic growth
with at least the threat of higher interest rates.

In
my mind neither side is willing to bet the ranch – both realize that the Fed
really does not have to “do” much – talk here has been a big stick for years.

What
I’m more interested in here is a change in attitude relative to physical
demand.

At
the present time central banks (especially the Russians and smaller players)
are buying, for them it’s already cheap enough. But for most everyone else they
seem willing to wait for “cheaper” – especially because the technical picture
for gold is nothing to write home about. This dynamic will not change much
unless inflation becomes a problem.

And
here is where the rubber meets the road if you are old enough to remember this
admonition. There is a serious discussion going on right now which suggests
that the reason we are not seeing the usual inflation numbers is because we
have invented a new, more efficient economic machine driven by more and more
consumerism. This “new wave” thinking may be the reason gold has enjoyed fairly
steady pricing at the lower end of its current trading range.

I
don’t buy this argument and believe that more money in circulation equals (eventually)
more inflation – which will eventually support increased safe haven demand and
higher gold prices.

Now
look at the 30 day pricing chart – earlier in the month gold held around
$1290.00 pushed to $1306.00 and collapsed to $1275.00. Fine – but this market
did not (according to Hoyle) continue to fall apart – it held that $1275.00
line while everyone wondered if this would be a short-term bottom. This
potential “floor” is still in question with today’s weaker aftermarket – yes it
is pushing lower but whether it will break even lower is still unclear.

I
think everyone is still waiting for something more definitive, perhaps from the
FOMC or in some other area. Some thought the Chinese tariff problems with
Washington would be a catalyst – failure would damage the already problematic
world trade increasing safe-haven demand.

But problems
in China, Europe, England (Brexit) even an unstable Venezuela and Iran have not
moved the supply/demand conversation enough to dissuade either the bulls or the
bears.

Look
at gold’s 52 week high (1360.00) and 52 week low ($1183.00) and it’s easy to
see why the public remains ambivalent. A similar conclusion with silver – 52
week high ($17.68) and 52 week low ($14.09).

At
least with the physical silver market the trade gets crowed at the cheaper end
of this spread – silver approaching $14.00 creates a storm of interest in the
traditional bullion products like 90% bags, Monster Boxes, 1 and 10 ounce bars.
And actually while no one has to wait long to fill an order – even at cheaper
prices silver bullion production does lag.

This
might suggest that at these lower prices there really is not as much produced
bullion as everyone believes – which is good for the buzz market. A spike in
prices and the “sold-out” sign would appear everywhere.

So
what do you think about gold’s apparent inability to make up its mind? Before
you say that gold is breaking down consider that once a weaker aftermarket made
itself clear today – our phones became very active – the public still likes
cheap.

Silver closed down $0.25 at $14.65.

Platinum closed down $13.90 at $874.20 and
palladium closed down $38.30 at $1349.10.

This
is our usual ETF information – Gold
Exchange Traded Funds: Total as of (4/24/2019) was 68,625,671. That number
this week (5/1/2019) was 68,175,653 ounces so we dropped 450,018 ounces of gold.

The
all-time record high for all gold ETF’s was 85,108,867 ounces in 2013. The
record high for Gold ETF’s in 2019 was 70,515,544 and the record low for 2019
was 68,175,653.

Silver Exchange Traded Funds:
Total as of (4/24/2019) was 612,298,249. That number this week (5/1/2019) was
612,344,190 ounces so we gained
45,941 ounces of silver.

Platinum Exchange Traded Funds:
Total as of (4/24/2019) was 2,809,981. That number this week (5/1/2019) was
2,798,562 ounces so we dropped
11,419 ounces of platinum.

Palladium Exchange Traded Funds:
Total as of (4/24/2019) was 728,327. That number this week (5/1/2019) was
727,679 ounces so we dropped 648
ounces of palladium.

We
believe our four flat screens downstairs with live independent pricing are
unique in the United States. The walk-in cash trade can see in an instant the
current prices of all bullion products and a daily graph illustrates the range
of the markets on any given day.

Yes
– you can visit the store with cash and walk away with your product. Or you can
bring product to the store and walk away with cash. We will also wire funds
into your account that same day for a small service fee ($25.00) if you are in
a hurry.

In
addition to our freshly ground coffee we offer complimentary cold bottled
water, Cokes and Snapple. We also provide fresh fruit in a transparent attempt
to disguise our regular junk food habits as we sneak down the block for the
best donuts in the world (Randy’s).

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Blessings and thanks for reading.

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